Computerized Accounting Environment

ERP

An ERP meaning Enterprise Resource Planning is a process whereby an enterprise, often a manufacturer, manages and integrates the important parts of its business. An ERP management information system integrates many areas such as planning, purchasing, inventory, sales, marketing, finance, and human resources. ERP is most frequently used in the context of software, with many applications.

Suggested Videos

Play
Play
Play
previous arrow
next arrow
previous arrownext arrow
Slider

 

ERP Meaning

An ERP is an enterprise application. The global economy has integrated rapidly since the Information Technology revolution a sea of change has appeared in enterprise management software. In such an environment businesses have considered accounting software and enterprise resource planning (ERP) software interchangeably.

However, an understanding of the difference between accounting software and ERP software can be identified by looking at the range of functionality traditionally offered by each of them.

Accounting software deals with accounting transactions such as payroll, accounts receivable, accounts payable, and trial balances. ERP software is a resource management system, tracking tangible and intangible assets, materials, human resources, and financial resources etc.

ERP software covers a range of functionality which is not generally offered by accounting software, often factoring in intangibles like human work hours, product lifecycles, performance units, and customer relations.

Accounting software and ERP packages have come to mean the same thing in today’s market is that accounting software as we traditionally understand it is fading away. Some of the popular ERP accounting packages are being mentioned here.

  • Sage 300
  • Microsoft Dynamics NAV
  • SAP Business One
  • Epicor 9 (formerly Vantage)
  • Microsoft Dynamics GP
  • Macola ES (Exact Software)
  • Sage 100
  • Netsuite (updated 8/8/2016)
  • SysPro
  • Sage X3

Organizations implement ERP for the following reasons:

  • To replace out-of-date ERP software
  • To replace home-grown systems
  • For replacing accounting software
  • For replacing other non-ERP packages

ERP Meaning

(source: freepik.com)

An Enterprise will typically use a combination of different modules to manage back-office activities and tasks including the following:

  • Distribution process management
  • Supply chain management
  • Services knowledge base
  • Configure prices
  • Improve the accuracy of financial data
  • Facilitate better project planning
  • Automate the employee life-cycle
  • Standardize critical business procedures
  • Reduce redundant tasks
  • Assess business needs
  • Accounting and financial applications
  • Lower purchasing costs
  • Manage human resources and payroll

Benefits of implementing an ERP Software:

1. Competition

It’s fact that ERP software requires a major investment, but there’s also an even bigger cost in not making the investment. While some manufacturers choose to stick to the tried and true traditional methods, others seek technological solutions.  Manufacturers cannot afford to put off an ERP package implementation while their competition invests in ERP and starts achieving the many benefits we’ll touch on below.

2. Efficiency

An ERP solution eliminates many repetitive processes and greatly reduces the need to manually enter information. This system will also streamline business processes and make it easier and more efficient for companies to collect data, no matter what department they’re working in.

3. Forecasting

Enterprise resource planning software gives to users, and especially managers, the tools they need to create more accurate forecasts in business activities. The information within ERP is as accurate as possible, businesses can make realistic estimates and more effective forecasts.

4. Collaboration

Nobody wants to run a business with each department functioning separate from the other. Collaboration between departments is a crucial task and often necessary part of the business processes. With the data entered into ERP systems being centralized and consistent, there is no reason why departments cannot work together. The ERP Package also touches on almost every aspect of a business, thus naturally encouraging collaborative efforts.

5. Scalability

A Structured ERP system allows the addition of new users and functions to grow the initially implemented solution over time. When your business is ready to grow or needs extra resources, enterprise resource planning software should be able to facilitate that growth.

6. Integrated Information

No more issues with data spread across separate servers; all information will be housed at a single location. We can integrate platforms like CRM software with the ERP system, keeping data consistent, accurate, and unique. ERP facilitates Know your customer, their orders, and your inventory, all in one place.

7. Cost Savings

With one source of accurate, real-time information, ERP software reduces operational costs. It allows manufacturers to proactively manage its operations, prevents disruptions and delays, breaks up information.

Solved Example for you:

Question: What are the popular ERP accounting packages? 

Ans. Some popular ERP accounting packages are being mentioned here.

  • Sage 300
  • Microsoft Dynamics NAV
  • SAP Business One
  • Epicor 9 (formerly Vantage)
  • Microsoft Dynamics GP
  • Macola ES (Exact Software)
  • Sage 100
  • Netsuite (updated 8/8/2016)
  • SysPro
  • Sage X3

 

Share with friends
Customize your course in 30 seconds

Which class are you in?

5th
6th
7th
8th
9th
10th
11th
12th
Get ready for all-new Live Classes!
Now learn Live with India's best teachers. Join courses with the best schedule and enjoy fun and interactive classes.
tutor
tutor
Ashhar Firdausi
IIT Roorkee
Biology
tutor
tutor
Dr. Nazma Shaik
VTU
Chemistry
tutor
tutor
Gaurav Tiwari
APJAKTU
Physics
Get Started
Customize your course in 30 seconds

Which class are you in?

No thanks.